Federal Aviation Administration Core Compensation Consulting Services Market Survey

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1 Federal Aviation Administration Core Compensation Consulting Services Market Survey 1. Purpose The purpose of this market survey is as follows: Inform the public of a potential solicitation for Core Compensation Consulting Services Determine small business interest and seek capability statements for Core Compensation Consulting Services Obtain the information necessary to determine whether adequate competition exists to set-aside the competition among small businesses, service-disabled veteran-owned small businesses or 8(a) certified firms. The North American Industry Classification System (NAICS) code for this effort is Human Resources Consulting Services, small business size standard is $7M. 2. Introduction The Federal Aviation Administration (FAA) is currently in the fifteenth year of a broad agency-wide design and implementation of a Human Resource Management (HRM) system. Section 347 of the fiscal year 1996 DOT Appropriations Act authorized the development of the FAA personnel system under the authority of the Administrator. This legislation stipulated that the HRM system would be excepted from most of the traditional personnel laws under Title 5 of the United States Code. Under FAA s Federal Aviation Service, the agency, by law, still provides preference for veterans, protects whistleblowers, continues Merit Systems Protection Board (MSPB) appeals, requires employees to be loyal to the government, prohibits strikes, restricts certain political activities, provides existing Federal benefits and retirement plans, provides workers compensation, and prohibits discrimination. Further, by choice, the FAA also continues to follow certain parts of Title 5 including those that cover merit principles and prohibited personnel practices. The Appropriations Act directed the agency to implement a HRM system by April 1, 1996 that would increase the flexibility of line managers to recruit, hire, compensate, train, and locate employees to best meet the unique mission-related requirements of the FAA. The agency launched a strategic communication plan to improve knowledge and understanding of HRM systems, particularly the Core Compensation Plan and delivered extensive training to managers and the workforce to enhance organizational readiness for implementation of the pay systems. In 1998, FAA successfully piloted the performancebased Core Compensation Plan in the Research and Acquisition (ARA) line of business 1

2 (LOB). The pay system was expanded in April 2000 to all non-bargaining unit FAA employees. With subsequent inclusion of a number of bargaining unit employees into the Core Plan through negotiations, there are currently about 22,400 employees under the Core Plan or a negotiated version. Negotiations with other FAA unions continue on pay issues with the goal of bringing more FAA employees under the market-based and results-driven compensation system. 3. General Description of Required Services Services will include enhancing and refining the operationalization of the compensation system, including changes to policies, procedures, or systems. The objectives of this requirement are as follows: Identifying and emphasizing existing components, practices, and policies of the compensation system that are working effectively, Identifying components, practices, and policies that should be changed or revised to better achieve the agency s mission and business goals, and Identifying new strategies to better align all compensation practices to support the agency s mission and business goals. 4. Requirements In fiscal year 1996, with the authority granted by Congress the FAA was given significant new flexibility in personnel matters, exempting the agency from most Federal personnel regulations-including the compensation system requirements. Since its inception, the purpose of compensation reform in the FAA has been to increase organizational flexibility, support business goals and objectives, improve recruitment and retention of a talented workforce, encourage skill development and continuous learning, and support the emergence of a results-oriented and performance-based culture. Another important outcome for reform is to have compensation practices more fully aligned with the FAA mission and business goals to motivate employees to strive for higher levels of performance and productivity, and linking those higher levels of performance to accomplishment of FAA s mission and goals. This Market Survey is seeking information on firms capable of providing support for enhancing and refining the compensation system. The compensation system consists of several integrated compensation plans-the Core Compensation Plan and other compensation plans tailored for distinct subsets of the FAA's work force including the Executive Compensation Plan with its Base Salary Program and Short Term Incentive Program, and Specialized Compensation Plans negotiated with the unions. The most notable of these is the Air Traffic Specialized Pay Plan (ATSPP). 2

3 The FAA seeks assistance with the following: Refinement of the components of the Core Compensation Plan; Enhancement of the Core Compensation Plan as it continues to cover the majority of FAA occupations (all non-bargaining unit employees and many bargaining unit employees); Implementation and refinement of compensation plans for bargaining units (for example, Air Traffic Organization National Air Traffic Controllers Association (ATO-NATCA), Air Traffic Organization Professional Aviation Safety Specialists (ATO-PASS), Aviation Safety-Professional Aviation Safety Specialists (AVS PASS), National Air Traffic Controllers Association (NATCA) Multi-unit, American Federation of State County and Municipal Employees (AFSCME), with the intention that these plans, where practicable, will mirror the Core Compensation Plan; Refinement of all components of the Executive Compensation Plan for executives and other senior professionals. A significant part of the contractor's efforts will focus on continuing to train managers and employees on the system. The contractor will develop cost-models to estimate the financial impact of a variety of compensation component refinements, affecting distinct parts of the work force over several years. Other activities include analysis of the applicability and effectiveness of : Salary surveys (extensive review and analysis of competitive labor market data, making a determination as to which organizations to continue to survey and which new organizations to include); Training plans and training materials and the delivery of training as required by the implementation of refinements and enhancements; Fair Labor Standards Act status of FAA employees; premium pay structures; time-off compensation; locality pay and cost-of-living allowances; incentives; pay compression; use of compensatory time rather than overtime; 3

4 annual, sick, and compensatory time-off policies; pay and grade retention; dual career tracks; gain-sharing labor relations classification standards Organization Success Increase (OCI) process Superior Contribution Increase (SCI) process variable pay impact of the total Federal Government pay freeze on the current and future design of performance-based pay 5. Agency Impact With the compensation system there will continue to be a tremendous impact on the agency's large and diverse workforce. The FAA has a diverse work force of roughly 50,000 employees. The contractor must be familiar not only with FAA's work force, but also with the FAA's mission, vision, strategies, organizational culture, and personnel reform guiding principles and values. The FAA must have an integrated set of compensation deliverables. Successful refinement of the Compensation System hinges on an integrated set of deliverables that are aligned with changing business conditions, strategies, and tactics. The on-going schedule for the compensation system is dynamic. The refinement effort is scheduled to continue for several years and may be adjusted based on results of internal and external reviews and evaluations and direction from the Administrator. External interest in the new alternative compensation system continues to be high. The compensation reform initiative has been reviewed by the White House/President s Management Agenda (PMA), the Office of Management and Budget (OMB), the Government Accountability Office (GAO), the DOT and its Inspector General, the Office of Personnel Management (OPM), Congress, and numerous professional organizations. The initiative is still a prototype for the rest of the Federal Government as the White House and Congress consider the components of a new pay system government-wide. 6. Resources 4

5 To ensure that the stated objectives are accomplished and to further extend the knowledge already available on compensation reform, relevant planning, design, and implementation documents on compensation reform will be provided to the contractor. This information should be used as a reference point for understanding the FAA compensation system. Some of these documents are: Federal Aviation Personnel Management System (March 28, 1996) FAA Compensation Framework FAA Core Compensation Plan FAA Executive Compensation Plan Evaluations of Core and Executive Compensation Plans Personnel Reform briefings presented to external stakeholders (e.g., Congress, OMB) Superior Contribution Increase Desk Guide Air Traffic Pay Plan (applicable to Air Traffic Managers, referred to as MSS Manager, Supervisor, Staff Support) Air Traffic Specialized Pay Plan (ATSPP) The contractor will raise any issues that need resolution to move the refinements forward and coordinate, where appropriate, with the COTR to obtain relevant information on personnel reform implementation. The work must be conducted in accordance with applicable professional standards. The contractor, upon request, will be available to brief the FAA Administrator and other interested stakeholders on the status of the refinements. 7. Required Contractor Qualifications The FAA seeks the services of an experienced and qualified contractor. The contractor shall be qualified to consult on the design, development, communication, and implementation of a fully integrated and competitive total rewards direct-cash and variable pay program. The contractor will assist in the refinement of the FAA s compensation philosophy and base-pay and variable pay compensation architecture. The contractor must have deep and broad expertise in the design, communication, and implementation of private-sector and public-sector strategic compensation programs including experience developing a mitigation strategy for internal equity issues between employees covered by a bargaining unit agreement and those that are non-bargaining unit. The Contractor must have working knowledge of the organizational and workforce issues, complexities, and concerns regarding: o designing, implementing, and fostering workforce buy-in to a pay-forperformance compensation program in the private and public sector. o defining an organization s compensation philosophy; o determining and aligning base-pay compensation architecture, i.e., broadbands or traditional salary ranges, with organizational culture; 5

6 o making changes to an organization s Core Compensation program. The Contractor will be expected to provide subject matter experts to consult on refining the design, development, communications, and implementation of a fully integrated and competitive total rewards direct-cash and variable pay program. The contractor must have personnel with the skills and knowledge to refine an overarching compensation philosophy, so that the compensation philosophy promotes the FAA s mission-critical/strategic initiatives, business driver(s) and/or business model(s), and intended/desired organizational culture and workforce behaviors. 8. Requested Information The FAA requests the following information from interested small businesses: Capability Statement On company letterhead, provide your company capability statement specifically addressing the compensation consulting services detailed in this market survey. Past Performance Information - Provide the following past performance information for two federal contracts. 1. Client and Contracting Officer name and address 2. Contract type and period of performance 3. Contract total value 4. Name of pay system 5. Description of services 6. Size of organization Capability statements, to include past performance information are limited to five pages. The cover page is not included in the page count. Business Declaration - Submit a complete business declaration form with your capability statement. If your company is a Socially and Economically Disadvantaged Small Business 8(a), you must submit your Small Business Administration (SBA), 8(a) certification letter. These documents do not count toward the maximum page count. Responses are due November 21, 2011 at 9:00 a.m. Questions related to the market survey are due November 9 at 9:00 a.m. Answers to all questions will be posted as an amendment to the market survey. 9. Point of Contact (POC): 6

7 Submit your questions, capability statement, business declaration form, and SBA 8(a) certification (if applicable) to BOTH POC s listed below. Submit all items via on the date and time identified above. Nicole Smith Contracting Officer 800 Independence Avenue, SW Washington, DC Phone: address: Charles McGovern Contracting Officer 800 Independence Avenue, SW Washington, DC Phone: address: 7

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